Stop Losses: Protecting Your Capital

Stop losses are your insurance policy. Learn the different types — hard stops, trailing stops, and mental stops — and how to set them using technical levels.

Key Takeaways

• 1.A stop loss is a pre-set order to exit a position at a defined loss level
• 2.Trailing stops lock in profits as the price moves in your favor
• 3.Set stops at technical levels (below support), not arbitrary percentages
• 4.Never move a stop loss further away once it's set